Nikkei drops to 6-month low on global trade worries

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TOKYO, March 26 (Reuters) - Japan’s Nikkei share average dropped to a six-month low on Monday morning while the yen rose to near a 16-month peak, on persistent worries about a global trade war, although some stocks were in demand before they go ex-dividend this week.

The Nikkei fell 0.9 percent to 20,439.98 in midmorning trade after hitting a low of 20,347.49, the weakest since late September.

The dollar traded at 104.835 yen after falling to 104.560, its lowest since November 2016.

U.S. President Donald Trump signed a memorandum last week that could impose tariffs on up to $60 billion of imports from China, although the measures have a 30-day consultation period before they take effect.

However, with the business year-end looming on March 31 for a majority of listed companies, some stocks were bought before they go ex-dividend on Tuesday.

“Although buying by investors hunting for dividends should support the market’s call somewhat, we are eyeing much lower levels for the Nikkei going beyond,” said Yutaka Miura, a senior technical analyst at Mizuho Securities, adding that he expects a support level of around 19,500 over the next month.

Tokyo stocks also continue to be pressured by a cronyism scandal that has gripped the country and sparked a political crisis for Prime Minister Shinzo Abe.

Former Japanese tax agency chief Nobuhisa Sagawa, a key figure in the scandal, will be summoned to testify in parliament on March 27, a ruling party source told Reuters.